Although I am a strong advocate of AI tools in travel, I believe it will mainly serve as a co-pilot to human sales agents, as buying travel either requires a “Trusted” online brand or the trust built through a human sales interaction. After all, how many other products cost you £2,400 on average, and you only get a promise to deliver at a date often 6 months or more in advance?
Therefore, the primary threat AI tools pose to travel agents is that they allow nearly anyone to become one, leading me to predict a massive wave of new entrant travel agents working from home, part-time or full-time, over the next five years.
Many traditional consortia openly mocked Intelli Travel when it entered the UK market, offering an ultra-low entry point: you pay your money and get access to their platforms, commission, and personal holiday deals, with only a basic level of training required.
However, after signing up 37,000 agents, they are now recognised as a force to be reckoned with, even though some operators still complain about the number of calls they generate and feel that most deliver very few bookings and are only agents to obtain discounts on friends-and-family bookings.
AI Co-pilots will swiftly automate the booking process with tools like my own www.anybetter.com, enabling agents to compare all offers for a specific hotel from leading providers, including optional extras like baggage and transfers, to achieve an accurate final price comparison before booking.
Rather than relying on API feeds that only supply leading prices, this and similar systems use Agentic AI to script through sites to both retrieve pricing information and to deliver a customer to the final checkout page having used their profile information to complete all the required names, ages and address fields, along with the already expressed preferences in terms of baggage, seat selection and transfers.
AI tools also give agents access to the entire knowledge base of the internet about any hotel or destination in the world, so having been on multiple fam trips becomes less of a useful skill and more just a perk of the trade.
This means the primary skill for a travel agent will be generating leads, which is why we will see a wave of agents with million-pound turnovers, who are TikTok or Meta influencers, producing their own content and turning followers into customers.
We are already seeing leading social media players, such as Social Trinity and Trending Travel, enlisting influencers to license their content for lead-generation campaigns with partner tour operators, destinations, or hotel chains. How long before they form their own consortia and license booking technology?
Good agents need not worry, as the same AI tools will help them become even more productive by freeing up their time to focus on where the human agent truly adds the most value: talking to customers to fully understand all their needs and building trust, the basis of both conversion and repeat bookings.
AI-driven businesses like Travel Voice can even clone agents’ voices to assist customers while they are already on the phone or relaxing on the sofa with a glass of wine out of hours. This same voice can then power a personalised Travel Rep that accompanies customers on their phones to manage all their in-destination needs, such as recommending bars and restaurants, arranging taxis and excursions, and more. To be blunt, the agents themselves can never do this, so using AI can actually build trust and further enhance the customer-agent relationship.
Although many in the travel sector still dismiss AI as over hyped and claim that their customers still want the personal touch, smarter players are working out how to deploy AI to slicken up their operations and take a step ahead.
Take an honest look in the mirror and ask yourself, “Which one am I?”
he announcement that the DNATA group is to close Travel Republic, hot on the heels of On the Beach’s closure of its “Dynamically Packaging” (DP) trade arm, makes it feel like the end of the era for independent DP in the UK.
Having been deeply involved with the Dynamic Packaging sector since its inception, as a founder of On Holiday Group alongside partners Bill Allen (On the Beach) and Brian Young (G Adventures). I spent many enjoyable hours in Kingston pubs with Travel Republic’s founders, discussing strategy and exit options!
Unfortunately, On Holiday Groups’ VAT dispute with HMRC halted merger talks, and the guys became wealthy young men when selling out to DNATA on 28 December 2011, which now appears to be the business’s peak. At this point, they were serving more than 2 million customers annually and had seen their turnover rise by over 40% to more than £400 million in 2011, making them the clear OTA leader at that time.
Sensibly, DNATA tied the leadership of the business, Kane Pirie and Paul Furner, to the company through deferred payments for a further 3 years. However, the business never prospered the same way again, and like many acquisitions, as it lost its entrepreneurial drive and quick decision-making.
Only DNATA insiders will understand how, from these lofty heights, Travel Republic ended up licensed for fewer than 150,000 passengers in 2025, dropping out of the top 20 ATOL holders for the first time in 20 years.
However, I point to three key factors.
Ryanair: No Dynamic Packaging Business can survive without it.
The massive disruption caused by Covid-19 and Ryanair’s outrageous behaviour towards OTAs led to a legal battle between Ryanair and DNATA, after which Travel Republic removed Ryanair from sale for 4 years, from 2021 to May 2025.
Cheap seat access is vital for any DP engine. While competitors On the Beach and Love Holidays endeavoured to find workarounds to keep selling Ryanair during their openly declared war on UK OTAs, DNATA made the frankly arrogant decision that it did not need them. In my opinion, this move effectively destroyed Travel Republic as a competitive force.
I feel free to say this in hindsight, as I openly expressed it to the DNATA management at the time and felt great sympathy for the team, which did not have the power to overturn a decision made at the highest levels of the owner, Emirates.
Ryanair is the lowest-cost flight provider and is estimated to account for approximately 60% of both Love’s and On the Beach’s flight seats, with both businesses booming again after the Ryanair trade reconciliation.
High EasyJet API fees, squeezing OTA profits, and reducing access to Jet2 seats through its in-house tour operations have made Ryanair access essential, and not doing so has strangled Travel Republic, forcing it to reposition itself as a Dubai- and long-haul-focused operation.
The COVID-19 Google Algorithm Reset.
OTAs in general survived COVID-19 much better than integrated tour operators like Tui, specifically because they had a much more flexible model with no plans sat on the ground and no guaranteed or owned hotels sitting empty.
However, COVID-19 disrupted the hierarchy of Google visibility that protected the top three players’ traffic volumes. The Google history algorithm essentially means you pay less to be in the number one search position if you have been there for the last six months, which effectively blocks new entrants who have to fight their way to the top at great cost (a key reason why Low-Cost Holidays failed).
This created a relatively fixed and unchanging access to customers that existed before Covid-19, protecting relative volumes. However, the shutdown wiped out this history, turning it into a race among the major players to reestablish the pecking order once the bounce-back began.
As a privately held company, Love Holidays was able to be much more aggressive than On the Beach and Travel Republic, gaining a massive market-share boost post-COVID-19. This caused Travel Republic to spiral into consistent losses, which ultimately led to its demise.
Corporate Strangulation.
I am unusual in that I had a successful Corporate Career, rising to Deputy Chief Operating Officer of MyTravel, running all its UK business in 2003, before becoming the rogue Entrepreneur of my later career.
This provides me with insight into how corporate cultures have repeatedly undermined and dismantled nearly every acquisition made in travel.
People are central to every travel business because the most successful ones consistently focus on customers and brands, taking great pride in the businesses they have built.
Every time things get tough, the corporate accountants start seeking cost savings by merging IT, finance, and customer services across the business, which destroys this focus.
With Travel Republic, DNATA immediately expanded its use of technology across other parts of its business, shifting attention away from its UK operations, and further damaged it by incorporating its hotel-buying team into group roles to help establish a corporate-wide bed bank called Yalago.
I am sure these seemed sensible corporate decisions at the time. Still, inevitably, they damaged the Travel Republic operation, and when combined with remote, disconnected discussions about Ryanair, they ultimately put the business into a downward spiral from which it has never recovered.
Summary
I know many clever and resilient people who have worked at Travel Republic and other DNATA-owned businesses over the years, and most have enjoyed working for this generous and considerate organisation.
However, I really don’t think Travel Republic marks the end of the Dynamic Packaging era; it’s simply a natural shift, caused by the currents of disruption that have hit the UK industry over the last 10 years. Smaller, more tightly managed businesses can react and change direction more quickly to survive these issues.
I clearly don’t know the full story here, but I hope my analysis, written at 4 am from the Dominican Republic, offers some insights and demonstrates how much I care about the topic.
Having been around long enough to witness the birth of the internet and the impact of the migration to mobile on search, it’s fascinating to observe the beginning of the evolution towards AI Search.
Marriott published research this week indicating that the proportion of travellers using AI has risen to 50% from 41% last year and 26% in 2023, nearly doubling in just two years. Unsurprisingly, younger generations are adopting it more rapidly, but even my age group, 55-64-year-olds, shows a 29% usage rate.
In recent blogs, I have promoted the use of MCP standardisation API wrappers as a vital step towards enabling large language models like ChatGPT to ingest live pricing and availability data from travel businesses. Last week, the launch of integrations with Booking.com and Expedia was announced, allowing travellers to search for hotels using natural language queries such as “Find me a private house with four separate bedrooms near top golf courses in Austin, Texas, for less than £300 per night.”
This would have saved me the trouble of switching between Airbnb, Booking, and ChatGPT when planning the trip I’m currently on, though I’m still redirected to these sites to make the actual bookings. This will be the next pain point to be eliminated, with ChatGPT soon becoming a merchant of record and an even bigger player than Amazon, selling millions of products. However, most of these will still come from Amazon, given its clever vertical integration that has made it a key physical distribution player.
I have also been predicting the development of “Digital Twins” that enable us to build a detailed profile of our personal preferences and update it daily by monitoring all our purchases. Retailers like Amazon already use these AI tools to personalise the offers they present to you, and Google even monitors our conversations to inform their recommendation engines.
The most logical place for a “Digital Twin” is on a user’s phone, so hardware manufacturers like Apple and Samsung have a natural advantage in this race. That’s why, at the start of 2025, OpenAI signed a major strategic alliance with them to exploit this opportunity jointly, and all LLMs are partnering with the hardware required to deliver AI tools.
Wearable tech will also play a significant role in how we use AI going forward, with Meta teaming up with Ray-Ban and Google launching the Android XR glasses. These devices connect to your phone but offer extra utility by being hands-free: they function as headphones that use vibration technology in the glasses’ arms, and as listening devices with microphones positioned just above your mouth.
Most importantly, they can serve as a second set of eyes, relaying what you see and offering instant classification, research, or instructions directly on the lenses. I already use these when travelling to discreetly and instantly translate different languages into my ears, although it hasn’t improved my ability to respond yet, as I still need the Google Translate function on my phone to speak the language. But I’m told this is coming fast.
However, it’s the shopping function offered by these glasses that I’m really looking forward to!
Imagine that, instead of browsing retail clothing stores, you can look at a stylish outfit someone else is wearing and immediately see where to buy it online at what price, with your digital twin instantly showing all your sizes and colour preferences.
This may sound like fiction, but it will be part of our everyday lives within the next 5 years, so we need to start thinking about how these forms of AI will affect the travel ecosystem.
The only businesses protected from AI disintermediation are the travel asset holders—airlines, hotels, and ground transportation —while the rest of the market faces significant disruption.
Logic suggests that major travel companies like Booking and Expedia will grow even larger as they can gather more content while leading AI distribution through partnerships with large language models.
However, with the removal of language barriers, travellers are likely to become more adventurous, seeking unique and authentic experiences best provided by niche specialist businesses, which become more findable with AI search tools, so there will still be a place for the specialists.
I also expect “Event” based travel to boom, which is why I am investing in an MCP-based AI startup aiming to create the ultimate itineraries for Event travel.
The simplification of the travel booking process is also likely to create a new breed of Influencer “Travel Agents”, promoting destinations and specific trips via TikTok shops or Instagram, using their own authentic content creation. So again, I’m investing in this space.
I have always loved disruption, and this is likely to be the fastest and biggest change we have ever seen in the travel sector.
At today’s TransPerfect conference, we again heard that content is king, and in a world where customers visit websites, I could not agree more.
Good imagery and well-written, insightful content are essential for transforming Google-generated PPC clicks into bookings, but will this stay the same in a world dominated by AI Search?
All commentators predict that the arrival of MCP Servers, which enable Large Language Models (LLMs) to have agentic front ends that connect to thousands of suppliers to retrieve prices and availability, will mean that customers’ research will be conducted within the large language models themselves. Customers will no longer need to click out to suppliers’ websites to make bookings. Instead, it will act like Amazon, taking payments from customers or, to avoid ATOL package holiday regulations, use the customers’ payment details to either make component bookings via an MCP connection with suppliers or make one booking with an ATOL-bonded provider.
This evolution reminds me of the changes my own “On Holiday Group” (OHG) experienced during the “Dynamic Packaging” revolution that transformed the travel industry in the early 2000s.
Initially, we believed that the quality of our hotel images, descriptions, and video content would persuade travel businesses to use our website to book accommodation over our competitors. However, as the “Online Travel Agents” (OTAs) grew in size, our distribution rapidly shifted from human agents using our site to OTAs accessing our content and pricing via APIs (now replaced by MCPs).
These OTAs sourced the best content from suppliers like OHG, but then linked all suppliers’ prices to this content, and allocated bookings to the cheapest supplier.
So, it doesn’t take a rocket scientist to see that Large Language Models are likely to do the same. Therefore, what’s the point in investing in good hotel or resort content if it’s not going to be seen by your customers?
Neural River, my MCP consultancy, is instead advising travel companies on which “differentiators” besides content are likely to influence “Digital LLM” visitors, based on the assumption that their human users are unlikely to leave the AI Search engine to visit your site in future.
The core idea of AI Search is that it helps customers find the “Right” answer faster than Google’s ten blue link advertising directory. Therefore, it is likely to evaluate suppliers based on the speed of their responses and how well they meet their users’ needs.
Therefore, often “Less will be more” with “Cached” and “Curated” holiday recommendations, based on the top 10 holidays that match a customer’s requirements, which receive a better reception than showing the customer thousands of options, because they can be delivered faster and are more likely to meet the customer’s needs.
Initially, AI search terms will resemble those of Google, e.g., ‘Cheap Holidays to Spain,’ because this is how we have trained customers to search online.
However, as voice activation and the use of “Digital Twins” to shop for us increases, businesses will be faced with much more complex queries based on the customers’ age, wealth and preferences.
Don’t you think it’s strange that OTAs ask so few questions about a customer before making them search through thousands of holiday options? For me, this is one of the main reasons why homeworkers and high street agents stay in business.
However, this is all set to change with AI Search, and therefore, smart businesses will be investing heavily in harvesting the content that truly matters, which, in my opinion, is “Peer to Peer” reviews. This will allow them to classify holidays and present results in the same way Spotify or TikTok do by combining my purchasing indicators with a much broader “Lookalike” group based on age and demographics.
This is why TransPerfect, my hosts today, are continually refining their offerings and have decreased their revenue from translation-only services to 50% of their turnover, while exploring innovative new approaches such as enabling English-speaking customer service agents to manage multiple source markets using behind-the-scenes translation tools. Translations remain crucial for how UK businesses access new source markets. However, I believe it is the technology solutions provided by TransPerfect to support sales and customer service operations that will grow the fastest.
Standing still is not an option in the translation space or the travel sector, so what have you got planned, guys?
Online travel companies have experienced a 30% decline in Google PPC efficiency over the last six months, following the introduction of Gemini AI results at the top of search, as the first wave of AI search changes took effect. However, many have yet to deploy MCP Servers, and failing to do so could soon cause their online visibility to plummet.
The benefits of Large Language Models (LLMs) in summarising internet knowledge into an easily searchable database that provides answers more quickly are evident, but currently, users still need to visit websites to book travel or other services.
However, booking APIs can be integrated with LLMs, and a few early-stage partnerships have been launched, such as the one between Perplexity and TripAdvisor, to provide reviews, hotel bookings, and excursions that can be booked directly from the LLM.
Anthropic, however, radically changed the landscape when it launched the “Model Context Protocol” (MCP), a standardised open protocol designed to make it easier for AI models like Claude to connect with external data sources, applications, and enterprise systems, thereby enhancing their usefulness and flexibility.
Crucially, they have changed the integration resource requirement, with the product “Supplier” now having to map their own APIs and provide MCP Servers that the LLM can easily connect to. Without these MCP Servers, their products will not be visible or bookable within their AI search. OpenAI and Google quickly recognised the advantages and now also demand MCP servers for integration.
An MCP is akin to a standardised “Toolbox” that specifies which tools the LLM can use and then oversees their searches to provide information and, importantly, make bookings.
There are some significant implications here that need to be explored, as nobody yet knows which direction the LLMS will take.
How do you submit your MCP for connection?
Unlike Google, there is currently no method for submitting an MCP for connection, and you must rely on being “Noticed” by the LLM developers. This situation will have to change with the equivalent of an App Store emerging, and all MCPs will be reviewed and connected if they meet the standards. However, currently this does not exist.
How important is it to develop an MCP quickly?
Creating an MCP does require a degree of expertise. Still, agencies like Neural River are already emerging to offer either advice or delivery resources to help travel businesses implement MCP tools. As with everything, the first-mover advantage provides a significant advantage, as many LLMs may prioritise filling gaps rather than duplicating suppliers.
What will be the charging mechanism?
LLMs aim to get customers answers more quickly and offer a faster booking process. This implies that PPC is obsolete, and either a commission or booking fee will need to be paid.
Who will be the Merchant of Record?
In general, LLMs like Perplexity will likely follow the “Amazon” model and become the merchant of record, accepting payments to remove any friction from the search and purchase process.
This applies to lightly regulated accommodation-only sales in the UK but not to “Package Holidays” that are affected by the ATOL bonding regulations. Personally, I believe LLMs will bypass this by using customers’ own credit cards multiple times to book the DIY package holiday elements they offer, or by only using ATOL-bonded businesses.
To clarify, the LLM itself will never access a user’s credit card details, as a secure application layer, such as Google Pay, will store them. Therefore, don’t worry about the security of this element; instead, focus on ensuring that the MCP does not become an unsecured back door into your main reservations systems. This is relatively straightforward to accomplish as long as you recognise the threat.
Will customers still visit my website?
For the near future, the answer is yes. Still, just as mobile traffic initially accounted for a small percentage of site visits but has now increased to 68%, I expect customers to converse with their AI Digital Twins about their holiday plans. These digital twins will conduct all the research and present a shortlist to the customer before making the booking, using MCP access to the supplier. Therefore, your website will become less critical, and the ease of use of your MCP by other computers will be the key deliverable. So, where does this leave “Brand”?
MCPs will not only be used for AI Search.
Once an MCP toolkit has been produced, anyone can connect to it after a commercial deal has been made.
This will result in a new wave of travel businesses combining various MCP Services to develop many niche holiday products, and I have been busy registering relevant domain names and ideas.
Summary.
The LLM’s initial focus was on creating faster answers via AI Search, but MCPs now allow them to move into the search and buy space.
Currently, travellers visit an average of 72 sites and spend 23 hours planning their holidays. If I hear one more “Dinosaur” claiming their customers enjoy the process, I will scream at the sheer stupidity of their views and will gladly see their business shrivel and die.
Human Travel Agents still have a future because a holiday is the largest annual purchase that customers make, and “Trust” is a crucial element of that purchase. However, AI will significantly improve the efficiency of back-office operations for top sellers, inevitably leading to the rise of “Super Agents” and the decline of less efficient colleagues.
The second wave of search change is about to arrive, so hop into your MCP “Lifeboat” now.
As we move away from Google’s 10 blue links catalogue search to AI Search Engines that aim to provide “Answers” and not links, we have all been wondering what will replace SEO and PPC, to allow travel businesses to gain visibility in these new engines.
We now understand that the future is the Model Context Protocol (MCP): an open, standardised interface that enables AI Search Engines to find and interact with travel data and services instantly. Consider MCP as a universal adaptor, like a travel plug adaptor suitable for different countries, allowing AI agents to connect with various booking systems, hotel inventories, pricing engines, and more, without needing custom integrations for each one.
MCP was only launched by Anthropic in November 2024, but has exploded in relevance as major AI providers, including OpenAI and Google Gemini, have now adopted it.
A key weakness of Large Language Models (LLMs) is that they require massive computing power to convert the internet’s knowledge into a searchable database. Once created, these LLMS become outdated instantly, necessitating external links to databases to access up-to-date product pricing.
Most major AI players are openly stating that the incremental gains from adding more data to LLMs are minimal, and they are shifting their focus to more reasoning-driven approaches, whilst integrating up-to-date pricing and tools via MCP links.
This makes developing MCP wrappers for your API feeds to make them understandable by AI search engines a new but essential requirement.
Many years ago, I drew an analogy comparing travel websites to supermarket stores, where businesses spend too much time rearranging stock on the shelves and putting up special offer signs, instead of focusing on building roads to the supermarket and making customer parking easy.
This has never been more the case as we migrate to AI Search.
Very soon, each of us will have a “Digital Twin” on our phones that knows all our likes, tastes, and requirements. These AI agents will contact businesses using AI Search engines MCP connections to source the best holiday offers that match their master’s requirements.
Hence, many holiday makers will no longer even come to your website, with the research and choice stages occurring in the AI Search engine. These engines will choose their suppliers based on how easily their data is accessible via MCP.
This vision may take some time to be fully realised, but observe the visibility of Booking.com and Skyscanner in ChatGPT Agent and Perplexities Comet tools to understand the benefits of having MCP layers.
However, many UK travel businesses are unsure where to start their MCP journey because it’s a highly technical process that requires software, hardware, and a detailed data security strategy, as you’re integrating AI systems into the core of your technology.
This is why Ian Pattison, an ex-Google AI head and now CEO of my Neural River AI Consultancy, has focused his entire team on providing MCP implementation services.
Firstly, a business needs to document its existing visibility through a benchmarking survey, as implementing MCP is an iterative process that requires constant monitoring and feedback loops to drive improvement.
Most travel businesses likely already have price APIS to display their prices on comparison sites like Trivago and Icelolly.com. However, it’s essential to understand that AI engines will not just search based on price; they will also need contextual information, such as whether a hotel is suitable for families or adults, and what review score it has.
AI search queries will often be long and complex, such as “Find me the best 10 hotels based on review scores, for a 7-night holiday to Alcudia, Majorca in May 2026, suitable for families with a kids club and present them in price order”. To be a preferred partner, you will have to answer all these questions in your MCP response.
The exciting aspect of MCP is that it completely overturns the travel hierarchy, with the Google PPC algorithm losing its dominance, leading to an equal playing field where every travel business has a chance to gain access through offering the most comprehensive MCP services.
Inevitably, this will lead to new entrants and businesses that may dominate in the future, including those we have not yet heard of. However, being an asset owner, like a low-cost carrier’s tour operator, also provides a significant advantage, so don’t expect the wholesale change we saw when the internet and low-cost carriers destroyed the traditionally vertically integrated tour operators.
Summer 25 marks the 5th year of Easyjet Holidays operating as a separate holidays division with a dedicated internal management team running the business, and the company is expanding rapidly, readying itself to challenge Jet2 Holidays for the top spot as the UK’s largest Tour Operator. However, its history begins well before this milestone date.
Initially, Easyjet Holidays was created as a quick response to the success of Jet2 Holidays, which I helped Philip Meeson, and his team launch in 2007 after presenting the opportunity of launching a Dynamic Packaging tour operation on the back of their low-cost airline to fill the gap in the market left by the effective closure of MyTravel in the North following its merger with Peterborough-based Thomas Cook in the same year.
Having served as MyTravel’s Deputy Chief Executive, I gained direct insight into the threat posed by low-cost carriers and the internet to the dominance of large, vertically integrated groups in the package holiday sector. When MyTravel encountered difficulties in 2003, I left and founded the “On Holiday Group” together with MyTravel’s Purchasing Director Bill Allen and Cosmos Sales Director Brian Young, to exploit the rapidly developing dynamic packaging market, and quickly tied up with Jet2.
However, our time as technology and bed bank partners was always limited once Meeson recognised the strategic advantages of having an in-house tour operation, and after two years, he brought in Steve Heapy and many other former Mytravel staff to run his own operation.
Ironically, this in turn led to an opportunity to provide a tour operating platform to Easyjet Holidays in partnership with Hotel Beds, who operated Easyjet Holidays between 2014 and 2017. In truth, the experience was a frustrating one, as Easyjet always saw the tour operation as a “non-core” business and just a way of boosting ancillary income. They even refused repeated pitches to allow us to sell via the trade, as they saw it as a distraction they did not need.
This all changed when Johan Lundrum moved from managing the vertically integrated tour operator TUI to becoming Easyjet Airways’ CEO. He clearly recognised the advantages of a full-scale Easyjet Holidays and recruited Garry Wilson, along with several other former TUI staff, to oversee the new operation that launched in April 2019 for Summer 2020.
However, the timing could not have been worse, with Covid-19 taking hold in March 2020, effectively destroying the Summer 2020 and 2021 seasons before a slow relaunch in 2022. Nevertheless, Easyjet Holidays’ flexible model and lack of hotel guarantees allowed it to minimise losses compared to the UK’s market leader TUI, which accumulated substantial losses and debts during this period.
COVID-19 also taught holiday makers that DIY holidays came at a substantial risk, and a massive 31% expressed a wish to switch to ATOL bonded holidays, which the new operation was perfectly positioned to provide to its Easyjet Flights audience.
The 2022 year proved the concept for the new operations with its 1.1m carryings delivering a healthy £39m profit for the group. Passengers and profits have since been on a massively positive upward spiral, culminating in 2024’s 2.4 million passengers and £190 million group contribution.
I believe that Easyjet Holidays is just beginning its UK expansion and will continue to grow at a healthy rate of 25% per year, as it currently accounts for only 5.4% of its parent airline’s seats. In contrast, Jet2 Holidays is already reaching capacity limits, using on average 66% of its parent airline’s seats, with some core beach routes exceeding 80%. Easyjet Holidays can expand quickly by selling more to its airline customer base, whilst Jet2 Holidays depends on its parent airline opening new bases and routes, which requires creating new demand. Meanwhile, Easyjet is simply shifting customers from flights alone to package holidays.
Easyjet also has a £50 profit advantage per passenger over its OTA competitors, as it can capture a large share of free brand traffic from its parent flight-only business. This can be used to reduce prices or to outbid these companies for advertising clicks, both of which suggest that Easyjet Holidays will grow more quickly.
So no matter how you see it, the future is “Orange,” and I expect that over the next 5 years Easyjet will become a market leader with 8 million passengers. So the interesting question is,” Who will bear the cost of this growth?
I expect 65% of the extra 5.6m to come from simply converting Easyjet flight customers from DIY holidays to packages, but this leaves 35% or 2m to come from increasing market share at the expense of competitors.
Ironically, Jet2 Holidays’ current significant strength in trade distribution could become a weakness, as it has been secured at a low commission rate of 6% if agents want price parity. You might easily see some of this being lost if Easyjet offered volume-related commission overrides above this.
The rejuvenated Tui holidays, now that it has paid off most of its debt mountain and also agreed on a strategic distribution deal with Ryanair, look quite secure, as it has no competitors for its Dreamliner long-haul beach product.
So, this leaves the likely losers to be the OTAs Love Holidays and On the Beach, particularly as we see a migration from their Google PPC heartland to AI Search, where it is likely asset holders will be given preference.
This makes Love’s February 2026 IPO crucial for the business as it seeks to defend itself from the ever-expanding “Orange” machine.
The next 5 years are likely to be highly interesting.
Since the launch of “We Love Holidays” in 2012 by Alex Francis and Jonny Marsh, the company has adeptly navigated the industry, attracting a panel of industry luminaries as early-stage investors to enhance their credibility with Meridian Corporate Finance, which provided the initial £2m expansion capital.
They invested this money in developing the best “Caching” solution in the travel sector, which enabled them to take live API feeds from bed banks and build databases of prices that could be easily combined with similar flight “caches” to generate billions of holiday options.
This may seem simple, but developing algorithms to determine how often prices should be updated based on factors like time before departure, party type, or duration is complex. These algorithms are vital for minimising any price jumps customers notice when shifting from cached pricing, which might be outdated, to live prices required for booking.
Caching prices enabled Love to both speed up its results presentation and introduce innovations such as the “Month” view on hotel landing pages, where customers could see all the prices by date of arrival at the hotel, including flight costs. These allow them to choose the cheapest travel options if their dates are flexible.
However, it was not until Living Bridge bought the business for £190m in 2018 that the company had the capital needed to expand from 140 to 750 staff and implement a highly aggressive Google PPC bidding strategy that saw them reach the top spot on most travel search terms.
Like most travel businesses, Love was devastated by Covid-19 and suffered significant losses. However, its recovery from Covid has been remarkably impressive, with passenger numbers reaching 5 million and profits of £67.6m in 2024, twice that of their closest competitor, On the Beach, whom they have blown out of the water in terms of growth rate.
Few Venture Capital firms are willing to hold their investments longer than five years, and even with the disruption caused by COVID-19, Living Bridges’ exit is now long overdue. Having failed to find a trade buyer or VC investor, Love’s owners appointed Rothschild in July 2025 to facilitate an IPO that values the business at an eye-watering £1 billion in the first quarter of 2026.
In many ways, Love’s IPO timing is ideal.
Previously, there had been serious doubts about their long-term access to low-cost flight seats as Jet2 and Easyjet continued to expand their own tour operations and impose API fees of at least £24 per booking, damaging either the ability to offer competitive pricing or profits of OTAs. At the same time, Ryanair was actively hostile, trying to block access to their seats and calling OTAs like Love “Pirates” that were “Conning” customers and marking up Ryanair flights above their actual cost.
However, in January 2024, Rynair did a complete “U-turn”, with Love becoming the first Ryanair-approved package holiday provider, with access to all Ryanair flights with a Zero API fee, and it is now believed that Ryanair flights power over 50% of the holidays sold by Love.
This guaranteed seat access, combined with a large surplus of UK departing flight seats in Summer 2025, will have boosted turnover and profit substantially, and I expect record-breaking financial results for the year ended 2025.
But has Love reached the crest of their growth wave?
Investors closely analysing Love’s results will be worried by the 30% decline in the cost-efficiency of Google advertising, a key issue in most OTA board rooms. This decline is primarily attributed to the shift towards AI search engines, particularly Google’s introduction of Gemini AI answers at the top of search results.
Put simply, customers are finding their desired answers more quickly and with fewer clicks, significantly reducing the traffic available to OTAs, while the cost of these clicks has risen as OTAs compete for them.
Unlike On the Beach, Love has historically focused on driving traffic through Google or profit share deals with the social media giant “Travel Pirates,” rather than investing in above-the-line brand awareness campaigns.
Just as the advent of the internet destroyed the vertically integrated tour operators’ grip over high street distribution, the advent of AI Search could destroy Love’s stronghold over top “pay per click” (PPC) positions as the market evolves away from a PPC model, reducing its access to customers.
Many commentators argue that new AI agentic tools will enable DIY holidaymakers to bypass the OTA intermediaries and connect directly with asset owners, such as airline and hotel websites, to fulfil their holiday needs without the OTA markup, relying on credit card protection instead of ATOL cover in case anything goes wrong.
However, I believe Love could present a convincing counterargument that their “Caching” systems make them the ideal partners for AI Search engines seeking to help customers find the best prices for a holiday in Majorca, because they can offer their month view tools that show exactly this.
It is simply too early to predict exactly how AI search will affect Love and other UK OTAs, but I must admit that my doubts mean I will not be investing at a £1 billion valuation, as I believe Love may already have reached the peak of their valuation.
After my last blog on this topic, I was told by some senior industry players that I was “Delusional” and writing like a Sun Newspaper “clickbait” journalist.
In this blog, I’ll attempt to adopt the style of a Financial Times reporter, concentrating solely on the financial statistics that support my argument for Ryanair to acquire both On the Beach (OTB) and Love Holidays.
However, to do so, I will need to use EasyJet Holidays as my baseline for comparison, as it shows why the city is so eager for its rapid expansion, given that EasyJet earns a profit of £13.42 per return flight while a holiday passenger generates a significant £73.08 per passenger. Put simply, a holiday customer is five times more valuable than a seat-only customer (See below).
Key per passenger profit figures
When considering Easyjet’s Holidays’ profitability or its share of the parent company’s total flight capacity, it is essential to remember that the airline counts customers based on sectors flown. For example, a return trip to Majorca counts as two passengers, whereas the holiday division counts it as one customer. Therefore, in 2024, the holiday division with 2.6 million passengers used 5.2 million flights, accounting for 5.1% of the airline’s total 100.4 million seats.
However, it contributed £190m or 31% of the group’s £610m profit. It does not take a city genius to realise that EasyJet has a fast route to increase group profits by rapidly scaling its holiday division at 25% per year. (Public statement)
As the table below shows, EasyJet has a much higher profit per passenger than its OTA rivals, On the Beach and Love Holidays, which can only deliver £13.80 and £13.25 per passenger profits.
Although these OTAs face high API fees from Easyjet, unlike EasyJet Holidays, this has little effect on overall profitability since their primary seat supply comes from API fee-free sources such as Ryanair and their Turkish airline partners.
Similarly, it is unlikely that EasyJet Holidays will have an advantage in hotel purchasing. Like their OTA rivals, they have avoided extensive hotel guarantees and have a shorter trading history than OTB, whose buying team has over 20 years of experience in the dynamic packaging sector and which shifted en masse to On the Beach after the collapse of bed bank player On Holiday Group.
The relative size of the businesses of On the Beach and Easyjet Holidays is similar, but the rapidly expanding Easyjet and the larger-scale Love Holidays both have lower administrative overheads than the more mature On the Beach.
The key differentiator is that Easyjet Holidays has little marketing costs, as most of its traffic comes from its parent company’s flight-only website. Easyjet, as a travel “Super Brand,” has substantial direct brand traffic and, unlike its OTA competitors, is not reliant on costly Google travel search traffic at the destination, resort, or hotel level.
This gives it a dramatically lower cost of customer acquisition compared to its OTA rivals, and it is the ever-increasing cost of Google traffic that is strangling the profitability of OTAs and causing their capitalisation to be heavily discounted despite their current healthy profits.
Ryanair also owns calculators and, as a publicly quoted business, will have financial analysts asking, “Why are you not in the profitable Holiday sector?”
In my opinion, the decision to move into the sectors is a” no-brainer” because, like Easyjet, Ryanair could generate free traffic for its tour operating division. For instance, if it acquired On the Beach, it would immediately increase profits by eliminating its £20 advertising costs and expanding its scale to reduce overheads, bringing it in line with its competitor, Love. This could add a further £30, resulting in a potential profit boost of £50 to £63.25.
Love Holidays accounts, as a private business, are less straightforward to analyse, but why shouldn’t it also see a £50 increase in profits to £63.80, considering these are still a full £10 behind EasyJet Holidays? Applying this £50 boost to the combined 7 million passengers carried by the two OTAS would generate an extra £350 million in their bottom lines, representing a substantial shift in their existing combined profitability from £94 million to £444 million.
Therefore, even if Ryanair paid £1 billion, which is a P/E of 11, for the businesses at their current profitability, the increase in profits it could generate would result in a payback period of 2.25 years, representing an excellent return on investment for any business.
The acquisition would also provide both parties with a strong platform to expand into other key source markets for Ryanair, such as the large German holiday market, which sees 68m passengers travelling each year.
Now, obviously, some key objections have been raised against this argument, so let’s examine these one at a time
Ryanair never buy and prefers organic growth.
As the dominant low-cost carrier with a very clear model, why would Ryanair acquire another airline apart from access to slots or source market dominance? Hence, I agree they have so far preferred organic growth in their core flight market.
However, they lack expertise in the holiday sector, as well as the necessary technology and have a customer service ethos that few passengers would trust with their holidays. Partnering with trusted travel brands that have customer service commitments dictated by ATOL bonding regulations, which would eliminate any Ryanair customer service issues, makes a lot of sense.
Lastly, as all financial analysts will point out, accounting rules allow the entire £1 billion acquisition cost to be recognised on the balance sheet. Even with an aggressive 10-year goodwill depreciation costing £100m per year, the net boost to Ryanair group’s profits would be £344m annually. Not to be sniffed at!
Competitors would refuse to supply seats to the OTAs.
Easyjet and Jet2 are already the OTAs’ competitors and supply less than 25% of seats combined due to high API fees and restricted seat access, with Ryanair, long-haul scheduled airlines and core Turkish airline partnerships providing the balance.
In reality, just as when I headed Airtours, I traded distribution through my retail outlets with competitors; the same will likely happen again, and why would Easyjet truly benefit from cutting these high-margin API flight sales via these OTAS?
The Competition and Markets Authority (CMA)
Again, this is a possibility but unlikely given the size of Tui Holidays and the rapidly expanding Easyjet Holidays, which would mean that the new travel division would have less than 50% market share.
Conclusion.
With the approaching disruption that the move to AI search will have on the dominance that Love and OTB have over Google PPC click traffic, the ability to ability for management teams to “Dock” their business in a safe “Harbour” where they are guaranteed a significant element of free spin off traffic from the Ryanair website should be attractive, however, even I would hesitate to join Ryanair, unless I was guaranteed a degree of independence that they are unlikely to get.
From an investor’s point of view, it’s also a “no-brainer” as Love is owned by venture capital funds who are still involved long after their standard investment term and OTB as a quoted company is vulnerable to anybody offering a 20% premium over the low current share price.
No third party can predict Ryanair’s internal strategy, and I am sure there are many reasons why they would not be interested. However, the basic logic of the maths does not lie, and this is why I have explained it in such detail in this blog. Another unknown is how Easyjet and Jet2 would react to a Ryanair move, as the last time the UK market consolidated with the merger of Thomson and First Choice, further consolidation followed rapidly
I personally believe market consolidation is inevitable, with Ryanair being the obvious buyer, but I’d love to hear your opinions. Am I still promoting a flight of ‘Fantasy’ or a logical argument? If you spot any errors in my amateur financial analysis, please let me know, but remember this is a big picture issue!
This week’s holiday on an 8-cabin Gullet in Turkey reminded me why small boat cruising is my favourite out of the various catamarans, river cruises, or large ocean cruising we have done as a family over the last 20 years.
Although not as sleek looking as the mega cabin cruises that surround us in the harbour, the Gullet offers faultless practicality with reasonably sized air-conditioned en-suite cabins, along with plenty of sunbathing space for the 13 holidaymakers on board.
I appreciate the plentiful outdoor space on the Gullet because it allows you to find a quiet spot to read or join other members of the two-family group for a few wines or beers as the sun sets and we enter port. This, combined with flexibility around departure and arrival times, as well as the option for full-scale changes to the pre-planned tour itinerary to provide more partying time for the youngsters in Fethiye, makes the product a winner for me.
However, it’s always worth remembering that 80% of the enjoyment of a holiday stems from the people you’re with and the friendliness of the staff hosting you. We could not have had a more welcoming or helpful crew, where nothing was too much trouble, than our Turkish crew this week on the S.Nur Taylan.
The crews of almost all the cruise ships I have travelled on have been excellent, but a 2:1 crew ratio on a small boat means you get to know everybody by name and much more closely.
I developed a love for the tranquillity of sailing boats over power boats many years ago. However, I still frustrate my sailing mates with my refusal to show any interest in sailing beyond being a “ballast weight” who reads his book as we sail along and has zero interest in gaining the navigational skills or sailing qualifications that would allow me to buy my own boat. Not that I ever would as why buy what you can rent? In my mind, holiday assets are just weights that stop you from travelling to many other destinations.
Although I enjoyed our trips on twin-hulled catamarans around Greece, Turkey, and Croatia, the space is much more confined, and with just one Captain as crew, you’re far more susceptible to a disaster. Ours occurred in Ibiza when Waska, the captain, was such a contentious character that we ended up leaving a day early because he had upset the kids so much that they no longer wanted to stay on board with him.
Getting my group of five kids aged 18 to 29 to go on holiday with me now requires inviting partners and an expensive trip they can’t afford themselves. Like most kids, they expect the bank of mum and dad to cover the entire cost throughout the holiday as compensation for their company, but to be fair, it’s worth every penny as quality time with your kids is hard to come by when three of them live 5 hours away.
The youngsters particularly enjoyed last year’s cruise from Rome around the Greek Islands on Royal Caribbean’s latest mega-ships, Odyssey of the Seas, which can hold 4,200 adults. Undeterred by the large crowds on board, the kids loved the wide range of food and entertainment available from evening theatre shows, gourmet restaurants, bars, and multiple visits to the casino and nightclubs.
I, however, struggled and felt more like a “battery-fed chicken”, squeezed onto a sun lounger next to strangers and forced to get up at 6 am to join a queue for disembarkation tickets to ensure you could visit some of the popular destinations requiring tendering. Although I understand the benefits of the Mega Cruise lines, I have not found one yet that suits me, and I prefer the more “Butlins” like Airtours Cruise ships of old, as they were small enough for me to cope with. And did I even mention that the Royal Caribbean WIFI “Pirate Robbery” at £890 for the combined families’ various laptops, iPads and phones? It’s amazing the grips that stick in your mind post what was a fabulous multi-generational holiday to be fair.
We have only ever experienced one River Cruise so far, even though TV adverts for Viking Cruises have constantly tempted me. This was secured through a bid from my lovely wife Ruth at last year’s ITT conference with the fabulous Arose River Cruising brand.
However, once again, we failed to think it through properly, and a winter river cruise is an entirely different beast from their summer counterparts, as the cold weather effectively traps you below decks in spaces designed for only half their winter capacity. Add to this the fact that we were the only native English speakers on board, and it’s not surprising that things did not quite meet my high expectations.
The experience has not put me off, however, as these multi-city floating “coach tours” offer the freedom to get off each day and enjoy breathtaking views as you cruise at a slow pace down Europe’s beautiful waterways.
But small boat cruising remains my favourite, and we have just booked our third Croatian Cruise next year with 34 other travel sector buddies who, like me, love this particular brand of Cruising.
Each Cruise version has its pros and cons, but they all have one thing in common. They are in a healthy and expanding sector of the UK Travel Industry. Viva le Cruise!
